Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this, the company’s profi

[answerhappygod]

Tom Scott is the owner, president, and primary salesperson for
Scott Manufacturing. Because of this, the company’s profits are
driven by the amount of work Tom does. If he works 40 hours each
week, the company’s EBIT will be $455,000 per year; if he works a
50-hour week, the company’s EBIT will be $560,000 per year. The
company is currently worth $2.9 million. The company needs a cash
infusion of $1.2 million and can issue equity or issue debt with an
interest rate of 8 percent. Assume there are no corporate
taxes.